Aha, the confluence of two Economist issues. Mr Crapper invented an economic and efficient loo (Flushed with pride, Sep 1, 2012). Mr Lew is supposed to get us out of the economic crapper. (Jack be nimble, Jan 12, 2013, p 25) The government restricted toilet water use, now it takes 2 flushes instead of one. We used to poop in the bush and Bush gave us medical diuretics. Obama passed stool softener stimulus, and a new health system that's already backing up from the excess paper. Congress must get off the pot and do its "constitutional" duty. Pass a budget and control spending! Stop "innovating" government! (The great innovation debate, Jan 12, 2013, p11).

Obama should have the guts & the spine to veto/overule Congress in such matters that jepordise the financial security/credibility of the nation. This "fiscal cliff" fiasco needs to be put to rest, once & for all.

Prez Obama, show them rightwing numbskulls, who's in charge. You are after all the CEO of the nation..

You make it sound as if Turbo Timmy's shoes would be hard to fill. Hardly so. Let's give Jack the benefit of the doubt. Common folks, Paulson's credentials were sterling as far as the markets went and look what kind of legacy he had left for us. Turbo Timmy had/has more than a cursory understanding of the financial mechanisms of the markets and I have not talked to many (any) who would have been too impressed by his record as the Secretary of Treasury. It is too early to say that Lew will do jack about the economy...

Why I rarely read the US section anymore:
"...in late 2008 when the global financial system was in free fall. The crisis and recession are past; Mr Obama’s priority now is dealing with the deficit they left behind."

It would be far, far more accurate and less tendentious to have factually stated "they and he left behind."

I don't watch Fox or MSNBC. I prefer straight news with insight and without slants. I mostly get this in the rest of the newspaper. Alas, for the past several years the US bureau has given us a rehashed inside-the-beltway partisan perspective of Washington and a coastal-in, parochial view of the country.

Yes, I noticed this starting about 5-6 years ago. My hypothesis is that when the Economist began stressing expansion into US market for subscriptions, they also began to hire US-born journalists who almost all reflect such a bias.

I yearn for the day when British-born journalists gave their more balanced outsider reports on American politics in the Economist.

The one indispensable asset a Treasury Secretary has to bring to the table is enough credibility with the markets, and key players in those markets, to restore order in a crisis. Negotiations with Congress will always be run from the White House; a close relationship with the President can be developed. But credibility with the markets can't be developed quickly and, when it's needed, is really, really, really needed.
The Treas Sec. also has to be credible enough with the Hill to get it to undertake drastic measures when necessary.
Hank Paulson had that credibility, so when the mortgage crisis was about to bring the financial markets down, he could literally browbeat healthy institutions into taking over sick ones, preventing a complete disaster. He was also able to convince leaders on both sides that the situation was serious enough to require an extraordinary response.
Lew just doesn't measure up. He's very smart, and I'm sure the President wanted to reward someone who'd done a good job in the White House and represented his own core beliefs. But he's not credible among Republicans on anything, has no longstanding relationship with the financial markets, and has pursued most of his career on two ends of Pennsylvania Avenue.
If the financial markets sail through smooth waters for the next four years (does anyone seriously expect this?) it might be a fine pick for the President. But if there's any lesson from Presidential history, it's that Presidents are as defined by how they respond to crises than anything else. And Lew gives no sign of being good in the kind of crisis that would confront Treasury.

This debt ceiling situation looks like a much easier situation for Obama to navigate - he already has his revenue concessions, and the economy is on more sound footing than last time.

Congress is responsible for raising the debt ceiling, as well as for authorizing the spending which has already occurred. They are threatening to destabilize the economy because they think they have leverage by doing so. As they say, he who cares the least, controls the relationship.

My hope is that Obama will let Congress do nothing and cause default. Then he will axe all corporate subsidies, contracts, and anything else directly touching private business operations as a first priority, and watch the Tea Party get dragged into the streets and publicly disciplined.

Corporate self-interested influence over politics isn't going away without a bare knuckled street fight, and this time, the Tea Party is unwittingly picking a fight with financial megapowers who hold no elective office or reason to exercise restraint.

"Mr Obama and Republicans in Congress failed several times to strike a bargain that restrained entitlement growth and raised more revenue from an overhaul of the tax code. They settled for a smaller deal earlier this month that freezes taxes for most households, barely touches the deficit, and leaves several unexploded fiscal bombs to defuse."

The bargain is simple: print money to pay for it. C'mon, we all know they're not going to cut spending or raise taxes. Inflation, here we come.

"Failure to lift the debt ceiling would force the Treasury to stop paying some bills and even risk defaulting on the national debt."

Well, TE is being a lot more accurate this year. Last year it repeated the widepread lie that an unmoved debt ceiling NECESSARILY meant the Treasury would default on interest payments. This year it clarifies that it's merely a possibility.

Even that is still overblown. Anyone but the most incompetent (or treasonous) Treasury secretary would bend over backwards to cut payments on ANYTHING except interest or principal. Those would be the very, very last payments he or she would fail to make -- not only in ordinal terms but it would also be the last move of his or her career.

Various countries have 'shut down' their government (i.e., briefly stopped almost all other spending) for short stretches with zero negative consequence. Facing inability to borrow or raise more, any Treasury secretary would find numerous places to cut or delay expenditures. The consequences of a default on interest or principal payments would be far too great, economically and politically, compared to withholding bailout checks to influential corporations, delaying payments to defense contractors, or cutting funds for bridges to nowhere and other boondoggles.

TE is getting better at reporting this on topic, but still, as with so many of the major media, I still think it either enjoys scaring people by overstating risks, or it just plain does not understand treasury functions.

The complaint is not that he negotites too hard. He just does not negotiate. From what I have read, the complaint is that Lew will ignore their position and come back with proposals that were previously stated as totally unacceptable.

As an attorney with negotiating experience, I've experience this style a couple times. The end result is never better and this style simply prolongs negotiations and hardens positions.

If one wants compromise, infuriating the other side and wasting time is not usually a quality one wants.

But, like you said, my guess is that that may be the reason why Obama chose him.... since Obama is not looking for compromise.

Point #1: Budgets originate in the House. If Republicans - who control the House - were interested in curtailing spending, they'd let the US go over the "spending" fiscal cliff in two months and be done with it.

However, Republicans don't want to, and are already floating negotiation talking points via the press, to avoid the cliff.

Actually, the "Electorate" kept Republicans in charge of the House,which as you pointed out, is in charge of the budget. So, not sure that your reading of its "will" is accurate.

Anyways, and this is where sanity is important... if you taxed the wealthy exactly as Obama wanted, under Obama's own numbers, the increased revenues only take care of 10% of yearly deficit.

So, let me repeat... spending is the problem.. a problem that can only be solved by cutting spending significantly or by increasing taxes significantly on all taxpayers.

The "will of the electorate" however was never given that choice. Their choice was cutting spending significantly or slightly increasing taxes only upon top 1% of other people... a false choice when annual deficits are topping $1 trillion.

"The 'will of the electorate' however was never given that choice. Their choice was cutting spending significantly or slightly increasing taxes only upon top 1% of other people... a false choice when annual deficits are topping $1 trillion."

This statement is false.

The fiscal cliff would have made a large dent in the US deficit by both raising taxes and cutting spending.

The GOP chose not to go that route. They can still cut spending significantly if they allow the US to go over the second fiscal cliff in two months.

I'll bet you they don't. To me, this is hypocritical given their public statements of wanting to cut spending. In reality, they really don't.

Anyway, getting back to the original point, Lew is reportedly a strong negotiator.

All in all... you just argue and argue so that taxes go up... and for what vaunted public services? Medicare with fraud rates of over 10%, social security which everyone knows will go bankrupt no matter what you do, and with defense spending full of waste.

But you just want to argue and argue about how taxes need to go up so we can continue.

And how is the statement false about the choice... did Obama ever say that taxes must go up on the middle class? However, any rational person knows that unless you tackle spending (or even if you do), taxes must go up on everyone, not just the rich. Actually, taxes already went up on the middle class.

You choose to ignore the fact that government spending is out of control, in order to win points with liberal friends.

It is so bad that Obama administration even came out with regulations making most unpaid internships illegal (in order to push employers to give internships that are paid, i.e., taxable).

And about my original point - not compromising and being a douche is not the same as a strong negotiator.

Yes, and we all suffer... when douchebags convince literate people such as yourself that arguing over marginal differences in taxes is better than dealing with the huge spending cuts that are necessary.

Obama himself said that $500m in annual deficits is immoral (back before he was President), and now we have over $1 trillion in annual deficits. And yet you're cheering over raising taxes that doesn't even put a dent into the deficit (much less the $16 trillion debt).

Congratulate yourself and continue to play the fiddle. It's still sad.

Rather than insult people, I'd politely suggest that you provide a clear, logical argument when presenting your point-of-view.
Moving on: The US federal gov't is spending a lot of money for a lot of reasons. However, please keep in mind that borrowing cost is only 1.7%, with inflation at 2%. So, in theory, the US public is making money on the transaction.
For a better understanding of what's going on, I'd suggest the following by Larry Summers -http://www.ft.com/cms/s/0/552fd4a4-e854-11e1-8ffc-00144feab49a.html#axzz...

But I will keep it simple... When spending is more than revenue.. that's when it's too much.

But no point is saying anything.. some people are hellbent on spending other people's money.. nothing else matters. I just hope that this country has less of such people and more people that actually care about fiscal responsibility.

Good summary of your response: Raising taxes is always the answer.. and all money is my money.

If you run your own finances this way, I'd love to see your credit score!

Like I said before.. $80 billion in Medicare fraud is not a public service. Billions of other waste is not a public service, but you can't squeeze that corruption out if the answer is to throw more money at the problem.

I've lived in DC, I've seen the waste first hand -- had a girlfriend who worked 2 months as a temp and got a several thousand dollar "going away" party when she quit (in order to meet "budget goals"). Multiply that kind of waste over thousands of departments and agencies.... and the answer for you is... raising taxes... whatever.

As always you seem to place great stress on experience of financial markets as a pre-requisite for high office in government when in realty it is these so called experienced financial market capitalists and their cronies in Wall Street, that created speculative bubbles in all markets, including today with close to zero interest rates, first decimating the "Real Economy" from which it is still trying to recover, and at this time, compleatly distorting all financial markets which one has to expect will, when returning to some form of normality, namely interest rate levels in the range of 3/5% will again create massive dislocations in the "Real Economy".